Regionals Update: Flow-through deal prompts Continental to halt furloughs, revisit spin-off

 - July 11, 2008, 6:36 AM

Continental Airlines last month said it would end all pilot furloughs this year to stem excessive pilot-training costs at its Continental Express subsidiary. A “flow-through” agreement negotiated in ConEx’s pilot contract in 1998 allows furloughed mainline pilots to bid for positions at the regional airline.

Continental had previously announced plans to furlough another 100 pilots starting this month, but reconsidered the move when it found that its training costs would negate the potential salary savings. The company projected that the flow of another 100 mainline pilots into ConEx would require another 250 furloughs at the regional carrier. Since September 11 Continental has furloughed 439 mainline pilots, 233 of whom took positions at ConEx, contributing to the furlough of another 386 regional pilots.

Meanwhile, Continental has revisited plans to sell its stake in Continental Express after it canceled a planned IPO in the aftermath of September 11. A spin-off would retire the flow-through agreement, a consequence that last year drew harsh criticism from ALPA because of its perceived effect on ConEx pilots’ ability to graduate to the mainline.